SET researching social enterprise support
Stock Exchange of Thailand (SET) is studying the possibility of encouraging social enterprise (SE) businesses to raise funds from the capital market to support business growth and social development simultaneously.
The bourse believes social development impact and awareness of environment, social and governance (ESG) will be the norm for doing business in the future, said Noppakao Sucharitakul, executive vice-president of SET.
“ESG is the future direction of the country, particularly for social enterprise business. We want to create a new type of entrepreneur with ESG and social impact concerns,” said Ms Noppakao.
ESG awareness reflects good risk management of businesses as they are concerned about other factors apart from the mere business risk, such as climate change and population well-being, she said.
SE businesses are a common concept in Europe, especially in Britain. In Thailand, there are some large SE brands such as Doi Kham and Abhaiherb, but Thais are largely unfamiliar with this type of business.
On July 10, the draft law supporting social enterprise business was approved by the cabinet.
Businesses registered as social enterprise will have their net profit waived from business taxes.
However, these business must contribute up to 70% of net profit to business or social benefits.
Companies that invest or donate to social enterprise causes are able to claim tax deductions.
The government expects that this law will encourage around 300 organisations and private companies to operate as SE businesses.
The SET has two stock markets and a fund-raising platform to help businesses raise funds from the capital market. These comprise the SET index for large companies, the Market for Alternative Investment index for medium-sized firms, and Live, the latest fundraising platform for small companies and startups seeking venture capital or investment from institutional investors.
“SE businesses in the early stages are similar to a regular startup, but their survival rate might be higher at around 60% as the starting point of the business originates and is developed from an intent to support social causes and development,” said Ms Noppakao.